Coinbase CLO Slams State Agencies Over Crypto Staking Crackdown Despite CLARITY Act

As the crypto industry rejoices over the GENIUS Act’s passage, Coinbase Chief Legal Officer Paul Grewal shifts focus to a critical concern—state agencies’ refusal to acknowledge the CLARITY Act’s crypto staking guidance. Despite the CLARITY Act’s clear stance on staking-as-a-service as a non-security, several state agencies continue to pursue claims against crypto firms. This discrepancy has prompted Grewal to advocate for a more unified regulatory approach.

State Agencies Overlook CLARITY Act’s Key Provision, Says Coinbase CLO

In a recent X post, Coinbase CLO Paul Grewal spotlighted the disconnect between the CLARITY Act’s staking guidance and state agencies’ enforcement actions. Though the CLARITY Act clearly identifies staking-as-a-service as a non-security, state agencies refuse to acknowledge this, states Grewal. His post read,

I gotta call out one critical provision of CLARITY Act that hasn’t received the attention it is due: staking-as-a-service is confirmed as a non-security and rule-making is ordered.

Notably, this development comes on the heels of the historic passage of the landmark GENIUS and CLARITY Acts. The CLARITY Act received bipartisan support with 294 votes in favor and 134 against, while the GENIUS Act passed with an even stronger margin of 308 to 122.

In specific, Grewal points out that five states, including California, New Jersey, Washington, Maryland, and Wisconsin, are pursuing baseless claims against Coinbase despite the CLARITY Act’s clear guidance. He adds that this stance is at odds with 32 Congressional Democrats from those same states who voted for the bill.

Further, Grewal emphasized the need to move away from the inconsistent state regulations. He urged alignment with Congress on clear, bipartisan crypto rules, expressing hope that the Senate would take swift action on the legislation. He wrote,

It’s time to end this patchwork of state regulation by enforcement and align with Congress on clear, bipartisan crypto rules. Coinbase looks forward to the Senate taking swift action on the legislation.

CLARITY Act Excludes Staking from Securities Laws

Interestingly, the Coinbase CLO bases his statement on the fact that the CLARITY Act explicitly excludes staking from securities laws. The bill classifies staking-as-a-service as a non-security. With this provision, DeFi protocols are expected to operate with greater confidence, offering services like staking and lending within a more transparent regulatory environment.

However, this provision is not widely known, as pointed out by Paul Grewal. Thus, it mandates rulemaking to provide further clarity and regulation in this area. This ruling will likely shape the future of staking services, offering greater regulatory clarity for both providers and users.

It is noteworthy that Coinbase has long advocated for clear crypto regulations. As part of its new strategy, Coinbase recently hired David Plouffe, a former adviser to Kamala Harris and Barack Obama, to its advisory board. The platform is now intensifying its lobbying efforts, targeting key Democratic lawmakers as the crypto industry navigates a complex landscape with the GENIUS Act’s progress and the CLARITY Act’s uncertain future.

Nynu V Jamal

Nynu V Jamal is a Senior Journalist at CoinGape. She boasts more than 3 years of experience in content writing, with expertise in crypto and blockchain. She has contributed to platforms like CoinEdition and CryptoTale, demonstrating her proficiency in navigating the dynamic crypto landscape.

Beyond her journalistic pursuits, Nynu is a literary enthusiast, having served as an Assistant Professor of English Language and Literature. She is a Master’s degree holder in English Literature and a UGC NET qualifier. Her academic background has enabled her to publish research papers on literature, while also nurturing her creative side as a published poet.

Her creative side extends to music, crafts, and art, which she actively explores. Her unique blend of analytical and creative skills allows her to craft engaging stories that captivate audiences. Stay updated with Nynu on LinkedIn

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